THE EFFECT OF MERGER AND ACQUISITION ON BANK PERFORMANCE (A case study of Intercontinental Bank Plc, Unity Branch, Ilorin)
TABLE OF CONTENTS
TITLE PAGE i
TABLE OF CONTENT vi-viii
1.0 Introduction 1-2
1.1 Statement of the problems 2-3
1.2 Objective of the study 3-4
1.3 Scope and limitation of the study 4
1.4 Significance of the study 5
1.5 Research methodology 6
1.6 Definition of terms and concepts 6-8
1.7 Organization and plan of study 8-10
2.0 Literature review 11
2.1 Conceptual issue on merger and
2.2 Motive behind merger and acquisition
in bank industries. 18-21
2.3 Effect of bank consolidation in the banking
2.4 Strategies of post consolidation on
the Nigeria economic. 23-26
2.5 The effect of post consolidation on
the Nigeria Economic 27
2.6 Benefit of merger and acquisition
on bank performance 28-29
2.7 Problem of merger and acquisition
on bank performance 29-31
3.0 Case study and methodology 32
3.1 Brief history of intercontinental bank Plc. 32-36
3.2 Research design and data collection instrument 37-38
3.3 Characteristics of the study population and sampling 38
3.4 Administration of the data collection instrument 38-39
3.5 Procedure for processing collected data 39
3.6 Limitation of the study 39-40
4.0 Data presentation and analysis 41-60
5.0 Finding base on data analysis 61
5.1 Summary 61-62
5.2 Conclusion 62-63
5.3 Recommendation 63-64
5.4 Suggestion for further study 64
5.5 References 65-66
1.0 GENERAL DESCRIPTION OF THE STUDY
The recent competition by banks to entrance their shares capital was spared by the induced consolidation exercise when may initiated by the governor of Central Bank of Nigeria (CBN) Professor Charles Soludo at te quarter of 2004.
The vision according to Soludo may ensure that, the financial service sector of the nation economic growth in recent time all, most of all the banks are going back to the nation capital to raise fresh fund to enhance their capital to raise fresh fund to enhance their capital base and expand branch network, locally and internationally.
The eagerness to raise more money that is the capital base may pushed than to incorporate merger and acquisition as a component part of their fund raising scheme.
June 1997 merger is the coming together of two or more company to become large company. While acquisition is when a bigger company acquire the smaller one in term of it financial responsibility.
In this case, the performance of bank may improved especially in the area of breach networking and the service they render to the general public modern to meet the demand of their customer, it may also improve the capacity of the banks to finance major project in Nigeria.
1.1 STATEMENT OF THE PROBLEM
The research work will show the problem of merger acquisition on bank performance as follows:
1. What are the problems associated with merger and acquisition on bank performance?
2. How merger and acquisition affect the banking industries?
3. What are the effect of merger and acquisition on bank performance?
4. What are the benefit customer acquire from bank as a result of merger acquisition?
5. What are the problem associated with merger and acquisition on bank performance?
1.2 OBJECTIVE OF THE STUDY
The objective of the study is on how the establishment on aims of merger and acquisition on bank performance. Therefore, the following lead to the aim and objective of the study.
1. I study this research to examine the conceptual issue on merger acquisition.
2. I study this research to find out how merger and acquisition on bank performance
3. I study this research to determine the effect on merger acquisition on bank performance
4. I study this research to enumerate the benefit customer acquire as a result of merger acquisition.
5. I study this research to find out the problem of merger acquisition on bank performance.
1.3 SCOPE AND LIMITATION OF THE STUDY
The study is cover the data collected from the bank chosen as a case study (Intercontinental bank plc Ilorin) the boards of director, corporate responsibility and management of the company.
The following may the problem we face in the course of writing the project such as the factor, lack of finance, unavailability of data from the case study chosen, lack of corporation from the members.
However effect may be made to ensure that the above constraint that limitation does not affect the effective completion of the research work.
1.4 SIGNIFICANCE OF THE STUDY
The significance of the research work will be on verification of the effect of the merger and acquisition on bank performance, it will also be in consideration on how and which way the company should, merger and acquire.
The following categories of people will benefit on the research work.
It enable the bank customers to have full knowledge that their interest is protected.
It will benefit the banking industries to have more knowledge on merger and acquisition.
It assist the student that makes the research work in this topic, to carry the research work more effectively.
It will enable the people from different profession to have on performance of banks.
It will also be a benefit for further research study.
1.5 RESEARCH METHOLOGY
The research methodology will limited to the data that will collect from the intercontinental bank plc Ilorin, all in the formation concerning the issue of merger acquisition of the intercontinental bank will be collected.
The source of our data is both primary and secondary data sources.
The primary data will be included textbook, material from the internet, journal, current annual report, periodically and management.
The population research will be basically on the staff and customer of intercontinental bank plc while the method of analysis of data will base on the percentages. The influential and description statistic is also employ.
1.6 DEFINITION OF TERM AND CONCEPTS
The terms attributed to merger and acquisition is provided, such as acquisition amalgamation, capital reserve, good will investee, investor, merger nominal value of the share, share premium, post acquisition and pre-acquisition reserve.
1. ACQUISITION: this is when larger company takes or acquires the smaller one by purchasing the other company asset. It may be hostly or friendly when both cooperate in negotiation. It may be hostile when the take over target unwilling to the bought or the target board as no prior knowledge of the offer.
2. MERGER: this is the coming together of two or more company to become large company.
3. AMALGAMATION: the combination of two or more companies in the same line of business for the purpose of making profit.
4. RESERVED: this is the process where by the net asset greater than the cost of acquisition.
5. GOOD WILL: this is the established reputation of a business regarded as quantifiable asset
6. INVESTEE: put money into financial schemes, share or property with the expectation of achieving profit.
7. NOMINAL VALUE OF SHARE: this is the actual number of share that investor has in the market.
8. POST ACQUISITION: this is the reserve before acquisition
9. RESERVE: this is the certain amount kept aside by the shareholder after sharing the profit.
10. SHARE PREMIUM: this can be define as the profit made in the share issued. It’s the amount paid to share holder on the share they have.
1.7 ORGANIZATION AND PLAN OF THE STUDY
These is divided into five chapters, each chapter will contain the following:
CHAPTER ONE: may contain the introduction, general description and statement of problem, objective and purpose, scope and limitation, significance of the study, research methodology, definition of terms and concept organization and plans of the study.
CHAPTER TWO: Treats interactive review in reduction, conceptual issue on merger acquisition in the banking industry, effect of bank consolidation on capital base, strategies of post consolidation in the banking industry, the effect of post consideration on the Nigeria economic, benefit of merger and acquisition on bank performance.
CHAPTER THREE: we discuss methodology brief history of the case study, research designed and data collection, instrument procedure for processing the collection data and limitation of the methodology, characteristics of the study, population and sampling and administration of the data collection.
CHAPTER FOUR: contain a brief introduction of the chapter presentation and analysis of the data according to research question and analysis of data from the case study.
CHAPTER FIVE: Discuss finding summary, conclusion, recommendation, and suggestion for the further study..